Research

This paper studies the impact of heat stress during a primary school-leaving exam in Indonesia, on outcomes in later life. The Ebtanas are a national standardized test that students must take to gain entry to secondary school. Using individual-level data on test scores, I first show that cognitive performance during the test is affected by heat stress. These impacts are heterogeneous across different subjects, with math and science being the most heavily impacted. Next, I show that disruptive weather conditions during the Ebtanas have compounding negative effects on a wide range of long-term achievements such as adult educational attainment, labor market participation and entry to the marriage market. A 1C increase in temperature in the month of exam leads to 1.12% less years of education, 2.62% less hours worked and a 2.3% higher probability of being married by 18 for women. These findings stress that even examinations conducted during early or mid adolescence, may have impacts that persist through adulthood.

This paper studies the repercussions of an agricultural productivity shock for labor market outcomes and inequality in India. I show that the increase in productivity had heterogeneous impacts on technological diffusion and local labor market outcomes. In wheat growing areas, the productivity increase was followed by investments in labor-saving technology, demonstrated by an increase in the use of tractors. Rice areas in contrast, invested more heavily in labor-enhancing technology such as fertilizers, creating new opportunities for application of labor. These shifts exacerbated inequality in wheat districts while reducing inequality in rice districts. I show that these results are robust to fixed effects and instrumental variables strategy. These findings demonstrate that driven by differences in environmental factor endowments, a productivity shock may have heterogeneous impacts on agricultural labor markets and inequality.

We examine the efficacy of genealogically constructed networks in sharing risk under aggregate versus idiosyncratic shocks in the context of split-off families in Indonesia. Aggregate shocks or droughts are calculated as Temperature Condition Indices (TCI) using MODIS satellite data. Idiosyncratic or health shocks are drawn from measures of reported health conditions of respondents in the Indonesia Family Life Survey. Aggregate shocks affect all families in the network at the same time, whereas idiosyncratic shocks affect only one household at a time. Hence, while informal transfers from split-off families, are effective in smoothing out idiosyncratic health shocks to households, they are ineffective in an aggregate drought shock. Family members adapt to aggregate shocks by making long-term structural changes to their split-off family networks. We demonstrate this in the formation of new split-off families over time who reside outside the district. Families are also more likely to have a non co-resident spouse if they incurred an aggregate shock in the previous period. These findings reveal that shocks to members in a risk-sharing network is an important source of omitted variable bias in empirical estimations of the impact of various shocks on informal transfers. It also shows important distinctions in household adaptive behavior in response to those shocks.